KeyCorp's return on average assets improved to 1.12% during the third quarter, from 0.85% in the second quarter and 1.06% in the third quarter of 2012. The company's return on average tangible common equity increased to 10.18% in the third quarter from 8.60% the previous quarter and 9.43% a year earlier.

The company's shares were up 3.3% in mddday trading, to $12.19.

Jefferies analyst Ken Usdin rates KeyCorp a "hold," with a price target of $12, and in a note to clients Wednesday wrote "Our initial take is that the 3Q print looks supportive of consensus next year."

The consensus 2014 EPS estimate for KeyCorp is $1.00.

"Operating EPS of $0.24 is slightly ahead of consensus due to better credit quality and lower operating expenses. Otherwise, net interest income and loan growth were inline, but core fees looked a touch light," Usdin wrote.

Sterne Agee analyst Todd Hagerman had an upbeat view of KeyCorp's earnings report, writing in a note that "KEY turned in another good quarter highlighted by ongoing credit quality improvement, conservative provisions, stable margin and spread, as well as increased share buyback."

KeyCorp bought back $198 million in common shares during the third quarter, increasing from $112 million in the second quarter. The Federal Reserve in March approved the company's plan for share buy backs of up to $426 million through the first quarter of 2014.

"To be sure, KEY continues to post incremental gains in bottom line profits as well, demonstrating good progress toward earning its cost of capital, improving efficiency and effectiveness, as well as honing its focus on operating leverage--positives toward moving KEY's pedestrian multiple higher--particularly in '14."

Based on KeyCorp's closing price of $11.86, the shares traded for 11.9 times the consensus 2014 EPS estimate.

Hagerman has a neutral rating on the shares, with a price target of $13.00.

KEY Chart KEY data by YCharts

Interested in more on KeyCorp? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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